Ask Question
5 April, 11:03

A firm has inventory of $46,500, accounts payable of $17,400, cash of $1,250, net fixed assets of $318,650, long-term debt of $109,500, and accounts receivable of $16,600. What is the common-size percentage of the equity?

a. 70.60 percent

b. 70.12 percent

c. 66.87 percent

d. 42.08 percent

e. 68.75 percent

+5
Answers (1)
  1. 5 April, 11:25
    0
    The common-size percentage of the equity is c. 66.87 percent

    Explanation:

    Total asset of the firm = Inventory + Cash + Net fixed assets + Accounts receivable = $46,500 + $1,250 + $318,650 + $16,600 = $383,000

    Liabilities = Accounts payable + Long-term debt = $17,400 + $109,500 = $126,900

    Basing on Accounting Equation Formula:

    Total Assets = Liabilities + Owner's Equity

    Owner's Equity = Total Assets - Liabilities = $383,000 - $126,900 = $256,100

    The common-size percentage of the equity = ($256,100/$383,000) x 100% = 66.87%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A firm has inventory of $46,500, accounts payable of $17,400, cash of $1,250, net fixed assets of $318,650, long-term debt of $109,500, and ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers